A contract is generally a written or spoken agreement between persons or entities that includes obligations for each party (mutual obligations or mutuality) and enough specific information to be enforceable by either party (specificity).

The elements of forming an enforceable contract are generally (1) an offer made; (2) acceptance of the offer; and (3) consideration given by each party for the other party’s performance of the agreement—such as money in exchange for products or services, or mutual promises exchanged—which is often referred to as the bargained-for exchange.

The word "agreement" is often used interchangeably with the word "contract," and a document labeled as an agreement (with the necessary legal elements included) is as enforceable as a document labeled as a contract.

In Virginia, as in most states, a contract is recognized as a legally binding agreement when it contains the essential elements of (1) an offer, (2) acceptance of that offer, and (3) consideration, which is something of value exchanged between the parties. This consideration must represent a bargained-for exchange, reflecting each party's agreement to provide something of value, such as goods, services, or a promise to act or refrain from acting. The terms of the contract must be sufficiently specific to be enforceable, meaning they must clearly outline the obligations and rights of each party. While contracts can be either written or oral, certain types of contracts must be in writing to be enforceable under the Statute of Frauds, such as contracts for the sale of land or agreements that cannot be performed within one year. In Virginia, the use of the terms 'agreement' or 'contract' is not determinative of the document's enforceability; rather, it is the presence of the necessary legal elements that makes the agreement a legally enforceable contract.